The question asks whether an entity holding an Electronic Money Institution (EMI) license can legally issue stablecoins, which are a type of crypto-asset typically designed to maintain a stable value by being pegged to a fiat currency or a basket of assets. The context suggests that the user is considering issuing a digital currency with a stable value and needs to know if their existing EMI status permits this under the Markets in Crypto-Assets Regulation (MiCA). The goal implied in the question is to explore a business opportunity within the regulatory framework of MiCA.
Ambiguities in the Legal Question
Nature of the Stablecoin: It’s not clear if the stablecoin in question is meant to be pegged to a fiat currency, a basket of assets, or another reference, which could affect its classification under MiCA.
Scope of EMI License: The user doesn’t specify the scope of their EMI license. EMIs are typically authorized for specific activities, and whether they can issue stablecoins might depend on the conditions of their license.
Definition of ‘Stablecoin’ in Legal Terms: The term “stablecoin” is not a legal term per se within MiCA, which categorizes crypto-assets through different definitions and criteria.
Jurisdiction of EMI License: The EMI license’s country of issuance isn’t specified, which may impact the applicability of MiCA depending on transposition into national law.
Assumptions for the Legal Analysis and the Plan for the Junior Lawyer
Note: The junior lawyer is what we call a subsystem of Hotseat that completes helper tasks
EMI License Holder: Assume the user holds a valid EMI license within the European Union, subject to MiCA regulations.
Nature of Stablecoin: Assume that the stablecoin they intend to issue is pegged one-to-one with a fiat currency, such as the Euro.
Intent of Issuance: The intention behind issuing stablecoins is to provide a digital payment instrument, not to offer investment opportunities.
Regulatory Scope: It is assumed that the user’s EMI licensing terms are standard and that the activities they are licensed for do not already exclude issuing financial instruments that could include stablecoins.
Plan for the Junior Lawyer:
Understanding Definitions:
Examine Article 3 to clarify the definitions relevant to the EMI holder’s question, focusing on the term “e-money tokens” which might be equivalent to “stablecoins”.
Analyzing EMI Capabilities:
Review and analyze Article 6 to determine if, under MiCA, the EMI license authorizes the issuance of e-money tokens.
Specifics of EMI-Issued Assets:
Consult Article 48, and pay particular attention to the restrictions and requirements for EMIs regarding the issuance of e-money tokens that could qualify as stablecoins.
Exemption Criteria:
Refer to Article 143 to understand any transitional measures or conditions under which an EMI might be allowed to issue stablecoins without additional authorization.
Submission of Crypto-Asset White Paper:
If it is determined that the EMI is permitted to issue stablecoins, instruct the junior lawyer on the process of preparing and submitting a crypto-asset white paper as outlined in Article 51, which includes stipulations for EMIs.
Scrutiny of High-Risk Provisions:
Inspect Title III, including Articles 16 to 23 and Annex II, to ensure understanding on how asset-referenced tokens are considered for high-risk classification, which could impact the issuance of stablecoins by an EMI.
Final Report Preparation:
Gather all findings regarding the capacity of an EMI to issue stablecoins according to MiCA, including any necessary steps or documentation needed for compliance, and prepare a final report with actionable guidance for the EMI holder.
Definitions and Terms from the Markets in Crypto-Assets Regulation:
Electronic Money Institution (EMI): An institution authorized to issue electronic money, which is a digital alternative to cash, legally equivalent to a monetary value stored electronically.
Crypto-Asset: A digital representation of value or rights, which may be transferred and stored electronically, using distributed ledger technology or similar technology.
Stablecoin: A type of crypto-asset designed to maintain stability in its value by being pegged to a fiat currency or other assets. Within MiCA, they may fall under the category of “e-money tokens” if they reference a single currency.
E-Money Token: A type of crypto-asset whose main purpose is to be utilized as a digital alternative to cash, maintaining stable value by referencing a legal tender currency.
Asset-Referenced Token: A type of crypto-asset intended to maintain a stable value by referencing several currencies, one or several commodities, or a basket of assets.
Crypto-Asset White Paper: A document provided by the potential issuer of crypto-assets that details the project, risks, terms, and legal aspects associated with the crypto-asset issuance.
Question Clarity Rating
Somewhat clear
Clarity Rating Explanation
The original question provides a clear intent; the user wants to understand whether as an EMI holder they can issue stablecoins. However, the question lacks specific details related to the type of stablecoins, the framework for issuance, and how this falls under the current regulatory obligations, particularly under MiCA. There are numerous types of stablecoins and regulatory considerations that the user may need to address, making substantial assumptions necessary to provide an accurate answer. Relevant details concerning their governance model, partnerships, and risk assessment could also significantly influence the legal analysis and are not provided in the original question.